Passengers pack themselves on to a crowded L train.
Photograph: William Mathis/AP

New York City’s subway and bus service is already in crisis. It could be getting worse. And more expensive.

Officials at the Metropolitan Transportation Authority (MTA) warned last week that without a major infusion of cash, they will have to drastically cut service or increase fares on the system that carries millions of New Yorkers around the city.

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Andy Byford – the transit expert and veteran of the London Underground who was brought in almost a year ago to rescue the subway from a state many commuters considered rock bottom – instead had to grapple with bad news.

“We don’t want to go down this road. We absolutely do not. It’s anathema to me,” Byford, the president of New York City Transit, said at a board meeting.

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The system’s financial straits have gotten worse in part because it has fewer riders, and is collecting less money in fares. Expected passenger revenue over a five-year period has dropped by $485m since July.

“They’ve entered this death spiral,” said Benjamin Kabak, who runs the transit website Second Avenue Sagas. “The subway service and the bus service has become unreliable enough for people to stop using it. If people aren’t using it, there’s less money, and they have to keep raising fares without delivering better service.”

The authority is proposing a fare hike that would take effect in March. One option would raise the basic fare for a ride to $3 from the current $2.75. Another option would leave the base fare the same but increase the cost of monthly passes and eliminate bonuses for riders.

They are also proposing $41m a year in service cuts, mainly increasing the time between trains and buses on some routes. And, if approved, the plan would delay the launch of faster bus routes.

Those changes will still leave the MTA with massive deficits, expected to hit nearly $1bn a year by 2022.

To tackle those deficits, officials say they would have to cut service more drastically, or raise fares by an additional 15%.

All those troubles come without accounting for any money to pay for Byford’s ambitious plan to actually turn around the crumbling subway system. That plan, which involves replacing an antiquated signal system that dates back to before the second world war, could cost $40bn.

The subway hit a crisis last year, when a state of emergency was declared. Delays more than tripled, from about 20,000 a month in 2012 to more than 67,450 in May 2017. The delays cost New Yorkers more than $300m in lost work time a year, an independent budget study found.

“Things are moving slower than they were in 1950. And at the same time we’ve had three fare hikes. Riders are already paying more for less. This is in the richest city in the world,” said Danny Pearlstein of the Riders Alliance.

Turning things around will require a huge infusion of cash. New York’s governor, Andrew Cuomo, who controls the MTA, favors congestion pricing, which would charge drivers to enter prime areas of Manhattan.

But the congestion pricing plan went nowhere this year. After Democrats claimed control of the state senate, advocates hope it may have a better chance next year if Cuomo puts his political muscle behind it.

MTA officials point to growing competition from Uber and Lyft to explain their dropping ridership, plus riders sneaking in without paying. Critics say it is bad service that is driving people away.

Byford acknowledged sending “mixed messages” to New Yorkers.

“They’re saying: ‘Well, hang on a minute, we’re paying more for worse service,’” he said. “Well, one of the reasons why service is what it is is because we don’t have enough funding … If we don’t have a fare rise, that only makes things worse. The hole gets even bigger. So until we can get these sustainable additional revenue streams, we really have no choice.”